[thelist] Merchant account
Keith
cache at dowebs.com
Thu Jan 10 00:13:32 CST 2002
Tamara's post on this subject was right on target. 2.9+.30 can be
more than reasonable for a smaller business by the time you
amortize all the other charges that can come with a merchant
account. She left out two important gotchas that are particular to
web accounts.
1) You're going to have to process the transaction, either live-time
or offline. Live-time processing is a hefty expense on top of the
merchant account expenses. If your client is selling shippable
product, live-time processing doesn't really make as much sense
as offline processing. But offline processing requires access to
some offline software that can run from $300 to $900.
2) You need to look out for the minimum months contract. Most
merchant accounts sold online are not sold by a bank or an ISO but
by someone who is simply reselling for an ISO. These accounts
frequently contain a 12 to 48 month fee contract. Statistically your
client will probably bail out of business when he/she has to renew
next year's SSL certificate. Well, that doesn't concern the shark who
sold them the account, they're still going to have to pay those
monthly fees. If the account seller you're looking at has a minimum
months contract in the fine print, move on, there are others who
don't. It's not pleasant to contemplate an exit strategy during a
startup, but it is wise.
Add it all up, something like PayPal can be a good way to find out if
the site's product, approach, and traffic will justify the expense of
using a system designed for heavy duty sales.
keith
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